ARM Loan Share Rises as Borrowers Seek Affordability

Rising interest rates continue to constrain mortgage borrowing. The Mortgage Bankers Association says its Market Composite Index, a measure of loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.4 percent compared with the previous week. The Refinance Index decreased 3.0 percent from the previous week and was 1.0 percent lower than the same week one year ago. Refinancing accounted for 30.2 percent of applications, down from 30.8 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index was down by 2.0 percent from the one week earlier. The unadjusted Purchase Index decreased 1.0 percent compared with the previous week and lagged the volume during the same week in 2023 by 14.0 percent. [purchaseappschart] “Inflation remains stubbornly high, and this trend is convincing markets that rates, including mortgage rates, are going to stay higher for longer. No doubt, this is a headwind for the housing and mortgage markets, with the 30-year fixed mortgage rate increasing to 7.29 percent last week, the highest level since November 2023,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Application volume for both purchases and refinances declined over the week and remain well below last year’s pace. One notable trend is that the ARM share has reached its highest level for the year at 7.8 percent. Prospective homebuyers are looking for ways to improve affordability, and switching to an ARM is one means of doing that, with ARM rates in the mid-6 percent range for loans with an initial fixed period of 5 years.”

May 1, 2024 Download our Mobile App: Download our Mobile App: Housing News ARM Loan Share Rises as Borrowers Seek Affordability Rising interest rates continue to constrain mortgage borrowing. The Mortgage Bankers Association says its Market Composite Index, a measure of loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an ... (read more) Mortgage Rate Watch Mortgage Rates Move Lower After Fed Announcement Wednesday brought a full schedule of events and data for the bond market to digest and bonds dictate day to day changes in mortgage rates. The morning's data was perfectly palatable, resulting in modest strength heading into the afternoon's Fed... (read more) MBS Commentary ADP and Treasury Refunding Announcement Do No Harm Bonds were roughly unchanged overnight, but began to improve modestly after the ADP data. Considering the numbers were higher than expected, that may be more of a relief bid, or even "new month" trading (8:15am is the time of the release and 8:... (read more) Rob Chrisman TPO, Market Analysis, VOE, Real Estate Search Tools; GSE and USDA News “I named my dog ‘5 Miles’ so I can tell people I walk 5 Miles every day.” This morning, I head to Yosemite National Park for some camping, hiking, and biking. National parks receive 325 million visits a year, about 4 million of which are Yosemite’s c... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.41% -0.10% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.41% -0.10 0.00 15 Yr. Fixed 6.84% -0.06 0.00 30 Yr. FHA 6.88% -0.11 0.00 30 Yr. Jumbo 7.60% -0.07 0.00 7/6 SOFR ARM 7.50% -0.05 0.00 30 Yr. VA 6.89% -0.11 0.00 Updates Daily - Last Update: 5/1 15 Yr. Fixed Rate 6.84% -0.06% Rate Change Points Freddie Mac 30 Yr. Fixed 7.17% +0.07 0.00 15 Yr. Fixed 6.44% +0.05 0.00 Updates Weekly - Last Update: 4/25 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 7.24% +0.11 0.66 15 Yr. Fixed 6.75% +0.11 0.64 30 Yr. Jumbo 7.45% +0.05 0.56 Updates Weekly - Last Update: 4/24 MBS / Treasuries UMBS 30YR 6.0 99.43 +0.37 Price / Yield Change MBS UMBS 6.0 99.43 +0.37 UMBS 6.5 101.08 +0.33 GNMA 6.0 100.46 +0.25 GNMA 6.5 101.49 +0.23 Pricing as of: 5/1 5:31PM EST 10 Year US Treasury 4.6355 -0.0474 Price / Yield Change US Treasury 2 YR Treasury 4.964 -0.077 5 YR Treasury 4.655 -0.062 7 YR Treasury 4.647 -0.060 10 YR Treasury 4.636 -0.047 30 YR Treasury 4.754 -0.030 Pricing as of: 5/1 5:31PM EST Latest Video Fed Chair Powell downplays 'stagflation' concerns Fed leaves rates unchanged and moves to ease the pace of balance sheet redu... Fed's Jerome Powell: Inflation remains too high and path forward is uncerta... Powell should be 'calm, cool, and collected' around rate decision, says Jul... Around the Web CNBC Fed leaves rates unchanged, as expected CNBC Why hundreds of U.S. banks may be at risk of failure CNBC Long-predicted consumer pullback finally hits restaurants like Starbucks, KFC and McDonald's ADP Private employers added 192,000 jobs in April WSJ Wall Street has spent billions buying homes. A crackdown is looming. CNBC Fed meeting live updates: Traders brace for details from central bank on rate policy outlook Calculated Risk Blog Freddie Mac House Price Index Increased in March; Up 6.6% Year-over-year CNBC Here's everything to expect when the Fed wraps up its meeting Wednesday Eye on Housing Private Residential Construction Spending Dips in March Calculated Risk Blog ISM Manufacturing index Decreased to 49.2% in April CNBC NYCB shares jump after new CEO gives two-year plan for "clear path to profitability" CNBC Treasury yields little changed ahead of Fed decision, policy guidance US Treasury Quarterly Refunding Statement of Assistant Secretary for Financial Markets Josh Frost

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